New Delhi, India (CU)_ It is projected that the Indian economy will contract by 7.7% in the 2020-21 financial year as compared to 4.2% growth in the last financial year, primarily due to the effects of the COVID-19 pandemic. The report says that this is the worst performance in the past four decades that the finance minister must focus more on the growth in the budget scheduled to be presented on February 1.
According to the first advanced national income estimates published by the National Statistical Office (NSO) on Thursday, all most all sectors witnessed a contraction except the agriculture sector. The report released by the NSO said, “Real GDP or GDP at Constant Prices (2011-12) in the year 2020-21 is likely to attain a level of ₹ 134.40 lakh crore, as against the Provisional Estimate of GDP for the year 2019-20 of ₹ 145.66 lakh crore… The growth in real GDP during 2020-21 is estimated at -7.7 per cent as compared to the growth rate of 4.2 per cent in 2019-20,” it said.
The NSO forecasts a major contraction in the sectors of mining and quarrying, and trade, hotels, transport, communication and services related to broadcasting. The government has now relaxed most of coronavirus restrictions and hence hopes for a marginal positive economic growth in the December quarter, which would also boost consumer demand and investments.
The manufacturing sector is expected to witness a 9.4 percent contraction in the current fiscal year, while growth remained nearly flat at 0.03 percent in the previous year. It is projected that the agriculture sector will witness a growth of 3.4 per cent in the fiscal year 2020-21. However, this will be comparatively lower than the 4 per cent growth reported in 2019-20 fiscal year. In the April-June quarter, the economy contracted 23.9 per cent and in the September quarter, 7.5 per cent.
